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A joint venture is a combination of two or more parties that seek the development of a single enterprise or project for profit, sharing the risks associated with its development. The parties to the joint venture must be at least a combination of two natural persons or entities.
Ing to the Chinese regulations in force, the equity share and distribution of the capital may be majority or minority. There are 2 types of JVs in China : the equity joint venture (EJV) and the cooperative joint venture (CJV). What are their characteristics ?
That purpose can be anything from completing a new project to breaking into the Chinese market. There are two types of China joint ventures: Equity joint venture (EJV): An EJV distributes both profits and losses in proportion to each party's equity interests. The joint venture must be a limited liability company (LLC).
Article 1 With a view to expanding international economic cooperation and technological exchange? the People's Republic of China shall permit foreign companies? enterprises? other economic organizations or individuals ?hereinafter referred to as ?foreign joint venturers?? to establish equity joint ventures together ...
Lack of control: Foreign companies often rely on a majority share interest to control their joint venture. Don't do this. Instead, exercise effective control through the right to appoint the representative director and the general manager.
To enter restricted Chinese markets, you need to form a JV with a Chinese company. A JV in China with a non-Chinese entity will not have the same effect. If the Chinese entity is a WFOE, a joint venture is not necessary.
How to write a Joint Venture Agreement Establish the details of the joint venture. Add information about your industry, location, and which type of venture you'll form. ... Describe the members of the joint venture. ... Set terms for business management. ... Set terms to help avoid or manage disputes.
Example. Sony Ericsson is a joint venture between Swedish telecom corporation Ericsson and Japanese electronics manufacturer Sony to develop cellular devices.
Examples of joint ventures Alphabet and Glaxo and Smith. Alphabet is Google's parent company. ... Molson Coors and SABMiller. Molson Coors and SABMiller were both brewing and beverage companies, and hence competitors. ... Microsoft and General Electric (GE) ... BMW and Brilliance Auto Group. ... Advantages of a joint venture.